Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

Qantas Regional Fleet Renewal

Old 27th Aug 2018, 03:42
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I wouldn’t be getting too excited by any of it. This article and subsequent speculation here has come about thanks to a graphic in the annual results presentation.

After negative words from S&P, Montgomery, and others, about Qantas’ need (upcoming requirements) for capital expenditures on fleet renewal, there needed to be some evidence that management has their finger on the pulse on this ‘sort-of-important-yet-inconvenient’ aspect of running an Airline.

Some Graphic Design lackey in IT or Marketing was told to skip the table tennis/Basket Weaving session in the street, given some Airbus/Boeing/Embraer/Bombardier marketing pamphlets and a couple of copies of Australian Aviation, and had the task of designing something to point to when Management came under pressure from being questioned on spending money Share Buybacks and Enormous bonuses, instead of focusing on using present financial success to set the airline up for a modern, fuel efficient future.
Qantas fleet metrics are horrible.

http://www.abc.net.au/news/2018-01-1...-study/9333616

Mr Montgomery shifted position after taking another look at Qantas.
Behind lots of self serving media, were bad numbers.

With the non cancellable order for the A320 order, a change to IFRS16 (leases) the on balance sheet structure of Qantas is going to change, it will be interesting to see.
They are trying to divert attention from their inattention to structure the fleet.

Their Cap Ex has been deferred as long as possible, while the self enrichment program went full steam ahead.

Qantas need a new fleet.

The B717 is not their big problem and a fully depreciated bedded in fleet even an older airframe is not an issue where given operating metrics are favourable.
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Old 27th Aug 2018, 06:50
  #22 (permalink)  
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IFRS 16 is not going to be a problem for Qantas as they have already been reporting their lease obligations for some years now - and frankly it's not a killer for any airline as most banks and financiers have wanted to see those "non-cancellable lease obligations" on the books anyway. Currency-wise it helps to be getting US dollars to act as a natural hedge, but that's getting off-topic.

All bar two of the 717s (YQW & YQV - leased from Boeing Capital) are now owned by Qantas, having been bought out at the end of their leases. Given only a portion of those were bought/leased by Impulse, the AD theory doesn't hold water. Rather, they intend to hold onto them for a while, and where values were, it was probably cheaper to buy them out rathrer than re-sign leases or pay the restoration costs for something that you want to hold onto anyway. Plus, the ratings agencies like to see aircraft on the balance sheet at the moment, and with a lot of cash available, Qantas has been buying up the 737s, A330s and A320s as they come off-lease to improve their credit metrics and bring down debt costs.

But, like any aircraft, at some point they will need a replacement, especially if they need something to run up and down the coast all day between the 737-800s, not just out West on the mining runs twice a day. And with fuel getting more expensive, the life of the F100s (especially on RPT) gets shorter, hence the look at E2s and A220s.

Qantas will need a new fleet, but it's not like they have to rush out yesterday and buy them. Their sights are on the NMA and A321LR for the prime domestic networks, and they are some way off. Virgin will get its first 737 Max next year, but it won't be until they get some scale with those that it makes Qantas fleet replacement a bit more urgent. And while replacing all those 737-800s will be a big order, there will be lessors and financiers lining up before the ink is dry on that order to do sale-and-leasebacks or debt financing - assuming that they don't pay cash for them, as they are with a number of the 787s.
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Old 23rd Sep 2018, 09:46
  #23 (permalink)  
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Originally Posted by Rated De
Qantas fleet metrics are horrible.

Qantas 'worst major airline' for fuel efficiency on trans-Pacific flights, study suggests - ABC News (Australian Broadcasting Corporation)

Mr Montgomery shifted position after taking another look at Qantas.
Behind lots of self serving media, were bad numbers.



Ah, not sure I agree with you there.


Statistics are all about lies, and damned lies.

Qantas doesn't have the fleet that I would choose, however, for all that, it is not bad at all. Qantas fuel policy is a minimum fuel policy with enroute despatch. It keeps the crews interested in the proceedings. Of all the airlines that I have conducted audits on, Qantas is one of the most frugal. That doesn't mean that it is insufficient, it is mere efficient.

Aircraft wise, yes, a B773ER is relatively fuel efficient against a B744, but it is not 50% more efficient. Not even close. The B773ER will burn around 7.8T average on a long haul for some 360 pax or so, dependent on cabin installation. The B772ER does the same leg with 300 pax and just on 7T average burn. The B744 flies the leg and burns 8.5-8.8T or so on average, and can accomodate from 380 to 450 pax. If you start getting the same amount of seat volume as the B744, the figures start looking worse for the 777. The B787 is not shabby at all. A plane that gets to 410 at MTOW is going to do rather well Transpac, particularly westbound. Both the B744 and the B773 have limited initial cruise level which plonks them right in the middle of the noserlies across the pond,

The A380 is not a bad performer, but Qantas gave more liebenstraum to the passengers, as do most of the 380 operators. That makes the metric considered here misleading (or suck)

Cargo load is a high value revenue earner, particularly across NOPAC or SOPAC. The metric considered here is misleading as it doesnt take into account the cargo load.

The appropriate metric is to consider revenue/cost, which of course assumes that you can nail down the load factor to that level of resolution, so that high value seats can be compared to others. Overall, if you want to look at the efficiency, look at the types within a single operator for a comparison of efficiency of the types, and look at common types fuel burns for a sector across varying airlines. This type of comparison is worked by Air Commerce in their analysis of aircraft, and permits a rational assessment of a particular types efficiency, and of a particular carriers efficiency with that type.

Consider the following simple logical point:

The article states Virgin, flying effectively the same route as Qantas achieves 33 ASK/L compared to 22 for Qantas.

The B777 vs the A380 presumably.

The VA B773ER seats 334 in 37J 24YP 278Y configuration. The plane does a 13,5 hour flight to LAX ex SYD and will burn around 110T of fossils.
The Qantas A380 seats 14P, 64J 35YP and 371Y.

With 100% LF (right, flat earth stuff) current revenue for pax only payload is about 809900AUD for the A380 and 449350AUD for the B777. Yield is dependent on customer quality/cost tradeoffs that are personal, but the airlines charge what they can. Effectively, the A380 is getting nearly double the revenue for the pax load that the B777 does.

The fuel burn is considerably higher for the A380, it is around 50% higher per flight, but even just with the seat number alone, the difference in seats for the aircraft are 42% more seats in the A380.

On sear numbers alone, the fuel efficiency per pax runs out to about 13% more fuel burnt by the A380,
On the pax revenue at 100% LF, the A380 gets 80% more revenue form the seats than the B777, so is more efficient.

The A380 carries 2 less LD3 containers than the B777-300ER can...

Overall, the maintenance cost of the different MPD's comes into play, as does passenger preference. I am a long in the tooth Boeing driver, but I will take an A380 for comfort over any Boeing currently built. I'm not a fan of Airbus, but having qualified on the A320-340 as well as the B727-B787, in the end they are just tubes (until the control logic changes).

The metric chosen in the ABC report is misleading. The seating as fitted is chosen by the airline to meet their market and achieve what they consider to be the best total revenue, which is determined by the yield per seat in each class. The A380 gets about 11% more than the B777 per gram of Jet juice.


Across the Pacific, an aircraft that can climb above the jet west/south bound is going to have a tactical advantage, which points to the B787 being a good transpac aircraft consideration, if the batteries and cabin compressors keep the smoke in the right spot.




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Old 23rd Sep 2018, 20:45
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fdr…

That's a very good post that provides a well-balanced summary.

I am a long in the tooth Boeing driver, but I will take an A380 for comfort over any Boeing currently built.
Me too.
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Old 23rd Sep 2018, 23:07
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I doubt the A380 will be considered for the REGIONAL fleet renewal...


If the 717s are 99’ builds, they need to get approx 25yrs out of them with the assistance of a cabin refresh-2024 replacement. Cobhams contract with QF is until 2026 I believe, allowing QF to pick and choose who gets the new toy then.
http://australianaviation.com.au/201...nk-717-flying/


The dash 8’s are still kinda young.
Q300’s are early 2000’s from memory 2001/2-2004?
are in the process of a cabin refresh, to get them to 2025-2029.
Q400’s- QOA was built 2005, and delivered early 06’ so have until 2030 and has the cabin refresh program starting next year to get them there.

Eastern/Sunnies people will need to wait for the rumours in 2 EBA cycles time 2027 for more “accurate” info.
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Old 24th Sep 2018, 00:10
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Originally Posted by noclue

Eastern/Sunnies people will need to wait for the rumours in 2 EBA cycles time 2027 for more “accurate” info.
Our negotiating team are already dusting off the single aisle jet clause and sharpening the pencil to keep it in the upcoming EBA.

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Old 24th Sep 2018, 02:13
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Sunnies and Eastern will never see jets now that network is up and running. If you think otherwise you’re kidding yourself.
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Old 24th Sep 2018, 03:52
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Around a dozen A320s to both Cobham and Network.

Gently prod the issue next time you’re in CBR. 717s on the way out. Unions know of course.

Right aircraft right route etc... 🤥

The apathy of the pilot group still amazes.. why people still fall over themselves to help out a bunch of misleading, half truthers is beyond me. At some point enough will be enough I’m sure, but will self interest be defeated in time?
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Old 24th Sep 2018, 05:15
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I can't believe after all this time there would still be an EAA/SAA pilot who thinks that either outfit is about to get jets.
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Old 24th Sep 2018, 10:08
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Originally Posted by Don Diego
I can't believe after all this time there would still be an EAA/SAA pilot who thinks that either outfit is about to get jets.
Sad but true. Why would you add cost and complexity to a turboprop operation by introducing Jets? Kendall made the best case for avoiding this years ago.

No more Jet experience in management would seem to back this up.
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